Prop 2: Charter Amendment to Stop Retail Subsidies

As with RG4N, the argument that the city shouldn't hire outside counsel is a complete and utter load of crap.

They City didn't HAVE TO spend $75,000 on lawyers...there's 120 staff attorneys there!

This was a p.r. move--using an outside firm to "validate" their opposition. If they came up with the bogus legal analysis at the Legal Dept., they knew it would smack of politicking on staff time. Of course, the taxpayers still flip the bill for consultants. Vincent and Elkins is a City-player that will craft anything they want in order to get the next job, footed by the taxpayers.

If ten great VMU projects open up next year, the Domain would still be about #20 on the list of "best VMU", meaning it would be superior to 95% of all the apartments in Austin on the metrics of urbanism and sustainability.

If a hundred great VMU projects open up next year, the Domain would still be better than 80% of the apartments out there.

It'll be a long time before it gets embarassing on that metric.

I'd never thought I'd say/think this:

Dahmus, you're being a bit optimistic.

This might be the first time you've stated something might work... simply because it could work.

I don't think it'll happen though. Progress doesn't move so gradually, or predictably. It moves in fits and spurts. Better vmu will develop and Domain-ites (Dominoes?) will be mocked for living in a mall.

The Domain is as urban as we're going to get out there past 183/Mopac. It's a good baby step for those people to see that "hey, being able to walk from where I live to where I shop might actually be a nice change".

And there are literally tens of thousands of people living in apartment complexes in that part of town which have all the disadvantages of urban living (lack of space, noise) with none of the advantages. All in density only slightly higher than the single-family crap that covers the rest of the land not being covered by strip malls. It's low-hanging fruit to start convincing those people to think about it.

Either way, those people are still renting from an evil corporate overlord, right?

The Domain only looks rosy from a retail perspective. From a lifestyle perspective, it's a dystopian nightmare. Like an Adbusters poster come to life.

Although, 1984 would have been a lot more interesting (and ironic) if Winston Smith had lived both in a totalitarian state, and yet above a Banana Republic.

Congrats to Shilli and Dahmus for their Austin Chronicle 'Best of' awards!

Seth

The Domain isn't a strip mall - it's pretty decent VMU, all things considered. Nice try, though, considering almost all of the local businesses behind the Prop II effort _are_ in traditionally shitty strip malls like the ones on Anderson near Northcross.

As I said a moment ago on BOR, it's only SOME local businesses that bear protectin', too. The new ones that took a chance and opened at the Domain (and on 2nd street) apparently deserve nothing more than our scorn because they haven't been around long enough to be part of the Granola Mafia.

As for me, if we're only offered two choices:

1. mostly national chains in sustainable walkable developments (with some flaws) - requiring some subsidies, but paying off in the long-run with fewer infrastructure and environmental costs

or

2. a smaller percentage of national chains, but still >50, in shitty suburban strip malls where you have to move your car 4 times to shop at 4 different stores, which create a huge cost to the taxpayers and the environment

you know where to find me.

I know a lot of the KAW folks (like the Chronicle & AA-S) are saying, "It's unfair to punish all retailers over the Domain deal. This will cripple the city's ability to offer future incentives for affordable housing, yada yada."

I say, tough shit. You people should've thought about the possible backlash when you rammed this through the city council in the dead of night, with almost no public input.

Tax cuts for suburban strip malls like Domain are bad government, period. Vote Yes on Prop. 2!

Who gives a shit if they were headed for La Frontera or Bee Caves. Ain't nobody buying that overpriced shit anyway. It's a fucking GHOST TOWN, mdhamus! We're not getting anything back anyway becuase nobody can afford this foofy ass shit.

And LoudMouth chimes in from crazytown. Thanks, LM.

The stores in The Domain were headed for La Frontera or the Bee Caves thing if they didn't come here. Meaning that the city would have gotten $0.00 of sales tax revenue from them without the subsidies.

And, no, Brian Rodgers isn't telling the truth when he insists the Domain would have been built without the subsidies. Without the subsidies, at best you would have gotten another copy of the low-rent strip mall south of Braker. Woo-hoo, right?

I'm also hearing a lot of unfounded speculation here so please allow me to unfoundedly speculate myself.

If we give tax cuts to the Domain, that means the City gets a large chunk taken out of it's budget at the start of every year. Meanwhile, The Frou Frou Store hears that The Million Dollar Store got a big tax break to come to Austin so they decide their next three stores should be built here too, all along MoPac and one next to Zilker Park. Meanwhile, The Million Dollar Store is building nuclear warheads to wipe out the competition and there's nothing to city can do to stop them since they have no money for law enforcement since we've been sparing the rich from paying their share. Will Wynn gets his pony, Jen Kim gets a week in Hawaii and you get to work another job to make up in property and sales taxes for the lack of revenue AND taxes The Million Dollar Store is bringing in but not paying our to the city.

Also, lets say you want some migas for breakfast but the only place to get them is Dennys and IHOP. That's the kind of future you're building when you vote No to Prop 2.

Grape Ape, I think most of us understand that but we simply don't think that private businesses deserve or need a handout. If we're cutting taxes to the Domain, who does that benefit? The Domain. Nobody else. If they;re going to pull this wool over our eyes, they may as well come out with who's got their wang in our asses and just make it a tax cut for every business netting over $1 million a year.

Grape Ape,

Are you suggesting people are leveraging the cultural wedge issue of The Domain to try and put the brakes on development in Austin?

Say it isn't so!

Trza - I think it would be reasonable to shift property taxes from retail to other property. Property owners and renters would be hurt by higher property taxes, but would benefit by greater retail diversity and competition and potentially by attracting retail that would otherwise locate in other cities. I think it is a difficult balance - my point is simply that I think it should be more in favor of retailers. I understand that not everyone would think it was a great plan.

Regarding who pays sales taxes, I think retailers pay at least part of it (similar to the way renters pay at least part of property taxes), even if it is tacked on at the end and categorized separately. I think most consumers take sales taxes into account when deciding where to buy something (in one city or another or on the internet), especially for big ticket items. The result is that retailers in high sales tax jurisdictions have to charge less or sell less.

People need to look beyond the Domain. This prop is about much more than that. This has potential to have negative effects on affordable housing and other developments that will include retail space in the city core. I think way too many people think this is specifically about the Domain and it is not.The same crew for Prop 2 are those that supported RG4N for the most part and we all know that they were wrong. I know people don't like change, but no matter how hard you try, Austin will never be a sleepy little college town again.

Shilli,

How exactly would you pay for this across the board tax cut? If you are cutting taxes in one place you are going to have to either: a) raise taxes somewhere else or b) cut services.

Holding services constant, you are going to have to raise taxes on somebody. Let's say you don't raise sales taxes. That leaves increasing property taxes. Most property owners in Austin feel that their property tax burden is already too great, and don't want to see that burden go up further in order to provide a windfall to retail businesses. Homeowners would shoulder much of this increase, which won't make them happy. Even worse, because renters don't get a homestead exemption or an appraisal cap, the tax burden will shift onto them over time. This is unfair, since renters have, on average, lower incomes than homeowners.

In addition, non-retail businesses wouldn't get the tax cut, so they would subsidize the tax cut for retail. Many non-retail businesses pay higher wages than retail, so you are in essence punishing employers that pay better wages to subsidize low-wage jobs.

Your last point is just wrong. Retail businesses do not pay sales taxes. Consumers pay sales taxes. Retail collects the tax and then remits to the taxing authority.

Generally I like your thoughts on development issues, but this is a bad, bad, bad idea.

But wait. Remember that the domain could have been built in Beecaves or Sunset Valley. If it's in Austin we (eventually) get the tax revenue. And we want rich people spending their dough in Austin so we get the tax revenue. Why should we be building roads to Beecaves and Sunset Valley where they get the tax revenue and we pay for the roads? I say we want more Domains! Rich people, please, spend your money in Austin and help us subsidize our schools and lower our property taxes!

Trza - how would cutting taxes on retail disproportionately affect low-income residents? My understanding is that reducing the sales tax is generally considered a benefit to low-income residents (e.g. NYC's elimination of sales tax on clothes and shoes under $110). I think reducing property tax on retail space would have a similar, though less direct, benefit on low-income residents by lowering retail costs and increasing retail competition, which would lower prices.

An across the board cut would benefit all retail in Austin, so it would not force existing businesses to subsidize their competitors (that is why I prefer an across the board cut instead of specific deals with individual retailers). It would redistribute economic activity from outside Austin into Austin, but that is exactly the point.

Additionally, retail currently bears a disproportionate tax burden by having to pay both sales tax and property tax. No one wants to pay higher taxes, but I don't think it would be "extremely unfair" to shift some of retailer's current burden to other property owners.

Hey mdahmus,

I don't think it's a reluctance to go urban; I'm thinking of the Triangle that has a similar model. In a similarly anecdotal guess, I'd bet that the cost of renting a spot next to Neiman Marcus and Apple is pretty high.

If that's not the barrier though, I can't say what is, so you may have something with the stigma of locals aligning with national chains.

Of course, that may work both ways.

Either way, the rest of the issue is a mess, and I'm staying out of it.

I know the Domain is billed as being somewhat "urban," but really it's more like a mall without a roof.

We don't need more retail, period. We certainly don't need to be paying people that don't want to set up shop in Austin to come set up shop in Austin. What we do need is better public services like schools and sidewalks.

"The problem with The Domain is that most of the stores are not local"

Why is this? Is it that local stores aren't interested in taking risks in moving to a more urban model? My anectdotal observation suggests that to be the case - only brand new local retailers seem interested in moving into urban storefronts (with a few exceptions, and even those edge cases like Jo's, whose original shop was pretty urban too).

If that's true, I'd argue that discriminating against existing businesses may be a feature rather than a bug. We don't need more strip malls - we need more Domains. Even if it's a pseudo-urban oasis in the middle of suburban crap that everybody drives TO, it's a baby step in the right direction - it shows suburbanites what urban development could be; and ironically, in a far more effective fashion than the current state of Mueller.

I wonder how much of the KAW drive is based on real ties to those in power and the false hope that the city will slip you some cash to start a business, and how much is based on a general dislike for the free market and small, local businesses.

So I wonder how much of the SDS drive is based on real economic/political disagreement, and how much is based on a general dislike of the "yuppie" Domain.

Wow, Shilli. I'm not sure you have thought your last point through. An across the board sales tax/property tax cut for retail? Really? So that homeowners, renters and low-income taxpayers who shoulder the bulk of the city's tax burden can subsidize retail? One of the primary arguments against retail subsidies is that it forces not only residents and but also existing businesses who don't get the tax incentives to subsidize their competitors. Retail subsidies most often just redistribute economic activity, rather than generate new economic activity. However, your across-the-board proposal would massively shift the tax burden from Austin retail to other businesses and residents, particularly low-income residents. Prop 2 may be a bad idea, but this is just crazy. And extremely unfair.